Publications

- December 1, 2020: Vol. 14, Number 11

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The space to offer services: When it comes to operational real estate, investors are almost spoilt for choice

by Iryna Pylypchuk

Operational real estate is becoming increasingly attractive to growing numbers of investors and investment managers. According to the INREV Fund Index and Investment Intentions Survey 2020, current allocations are at 11.8 percent of total real estate portfolios, and there is a desire among allocators to increase exposure.

It can be argued that the latest market challenges have accelerated many evolving trends in the market. These include a focus on tailoring space to specific audiences to stay relevant and to better manage risk, particularly where the success of occupiers’ businesses is anchored to an underlying physical asset.

The principal benefit of operational real estate lies in the ability for investors and managers to create bespoke opportunities from a menu of risk and return attributes, which are tailored to meet their investment objectives, mandates and fiduciary duty. The range of income and growth characteristics implicit within operational real

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